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Labour Market: Enable flexible and safe transitions

Economic dynamism requires individual social security in order to promote individual flexibility and willingness to take risks, which in the long run creates dynamics in the labour market. For this purpose, we want to develop orientation knowledge and recommendations for policy makers.

The changing world of work means new forms of employment and unstable, heterogeneous patterns of job histories. At the same time, our social security systems are not prepared for these developments and changes - for example from dependent employment to self-employment. 

For example, the income-protecting function of the traditional unemployment insurance has decreased for certain groups - such as atypically employed, low-income and self-employed persons. Many short-term and precarious employees are covered by basic insurance in the event of unemployment. This trend is likely to increase with the emergence of new forms of employment. 

Social security increases the expectation and planning horizon of the individual. This means that precise individual social security has a fundamentally positive effect on economic growth. If transitions in the labour market - for example from dependent employment to self-employment or even switching between jobs with different job profiles - are well secured, then individual flexibility and willingness to take such steps are easier to handle. This in turn promotes economic dynamism.

Adapting the welfare state to changes in the world of work   

There is therefore a need to adapt the welfare state to the new conditions of an increasingly globalised and digitised world of work in an ageing society.  

For example, the further development of the traditional unemployment insurance into a preventive "employment insurance" could be an answer to the new world of work. Transitions in the course of employment would be supported by times of further training.  Times for rasing children, caring for relatives should also be considered. 

It should be discussed whether an individual employment account can serve as financing basis in such transitional periods. Such an account could be set up during the course of employment and then be used for qualification phases, care or family work, start-up phases in the transition to self-employment, or for a flexible transition to retirement. 

Regarding new forms of employment and unstable job histories, it is still necessary to strengthen the traditional protective function of the traditional unemployment insurance system in order to enable people to return to employment as quickly as possible. 

In order to formulate recommendations for policy makers, our project aims to generate knowledge and evidence by means of studies and workshops. Looking at the European level and examples of best practices, plays therefore an important role for us.

Main questions

  • How can social security systems and the changingworld of work be better coordinated?
  • How do we restore the protective function of our security systems?
  • Would an employment insurance combined with an individual employment account be an effective way to deal with the new world of work? 

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